In the aftermath of 11 September, Europe had the chance to become the world's economic superpower - and blew it royally.

Europe has suffered no crippling terrorist attack, borne only a fraction of the burden of military response, endured no hi-tech meltdown (largely because it had no hi-tech sector in the first place) and remained immune to this year's wave of accounting scandals.

But its economy, dangerously sluggish before the US attacks, has only become more so.

Growth has stalled, stock markets have lagged Wall Street, the euro's rebound has lost momentum - and political and economic relations with the US have rarely been worse.

Without the excuse of internet collapses, 11 September or Enron, the Continent's stock markets have underperformed even the Dow.

And the euro, although successfully launching as a cash currency at the beginning of this year and rallying bravely thereafter, has remained consistently below its launch rate.

Feeling America's pain

The question is whether things could have been any different.

To a certain extent, Europe has been the victim of circumstances.

Although many like to think that Europe gains when the US loses, America's travails in the past year have spelt bad news for the eurozone economy.

As American companies pulled in their horns, investment in their preferred foreign market - Europe - shrivelled away.

Consumers, an increasingly powerful motor of the European economy, have proved just as skittish on this side of the Atlantic as in the US.

And the fact that the terror attacks were directed at the US did not make Europe immune from the financial paralysis of the post-attack months.

Bad behaviour

But Europe has done itself few favours.

Interest rates, which have been halved in the US since 11 September, have been cut by less than one-quarter by a grudging European Central Bank.

And with elections across much of Europe in 2002, notably in Germany and France, politicians have been reluctant to push through the slash-and-burn reforms needed to make the economy nimbler.

Most damaging of all - and to be fair, not something Brussels can entirely be blamed for - has been the alarming deterioration in relations with Washington.

Although tolerably staunch allies on the battlefield, Europe and US seem to be taking out their frustrations in the boardroom.

Tit for tat

Just before 11 September, Europe's increasingly pugnacious competition authorities vetoed a merger between two US firms, Honeywell and General Electric.

The rusty cause of much transatlantic anguish

Since then, a number of skirmishes have been fought in the trade arena, culminating in President George W Bush's decision in March to slap punitive tariffs on steel imports.

At the same time, Mr Bush signed into law the biggest package of farm subsidies in US history, an act that Brussels condemns as naked protectionism.

Behind both sides' positions lies a pile of ideological baggage: the US sees Europeans as hypocritical whiners; Europeans are increasingly vocal about American cultural imperialism.

Time for a change

So what are the prospects for Europe?

Economies are continuing to slow: the latest data out of Germany, by far the region's biggest, shows troubling signs of a "double-dip" recession, dipping back into the slump it escaped from earlier this year.

Don't talk about reform - it's election year

And as an assault on Iraq becomes more likely, the ideological gulf between Europe and the US will only widen.

One factor might shake-up the status quo, however.

The French election saw a shift to a right-of-centre regime; according to the latest opinion polls, Germany's - due in late September - may do the same.

The new French government is still feeling its way, and the hopeful German opposition is being careful as the election approaches, but both promise a substantial change of direction.

Of course neither may end up doing much to stimulate the European economy.